Local income tax hike clears its first hurdle

Police officers, firefighters and politicians packed Tuesday's Tippecanoe County Council meeting where the council approved a public safety income tax in a 6 to 1 vote.(Photo: Ron Wilkins/Journal & Courier)

LAFAYETTE — The first step to a higher local income tax to fund public safety cleared the Tippecanoe County Council in a 6-to-1 vote.

Councilman Roland Winger was the sole opponent to the tax increase, and he took time during the meeting to explain his objections.

Other council members voiced their support of the proposed 0.18 percent increase to the local income tax, which was reflected in the vote.

The tax increase still needs approval from either West Lafayette or Lafayette's city councils to produce a majority in the county's income tax board. That board is made of councils in the cities, county and incorporated town, and each board members percentage is weighted based on their respective populations.

So if Lafayette or West Lafayette approves the higher income tax, it will clear the 51 percent of representatives to the tax board needed to be adopted.

While the tax increase is not officially a done deal, it appears likely income taxes for those living in Tippecanoe County will increase in 2020.

“I am extremely confident this will pass the Lafayette City Council,” Lafayette Mayor Tony Roswarski told the county council during the public input portion of the meeting.

The Lafayette and West Lafayette city councils meet Oct. 7. If either council approves the income tax increase, it goes into effect on Jan. 1, 2020.

The tax does not affect those who live outside of the county but work in Tippecanoe County. But those who live inside the county will pay the higher taxes.

Firefighters and police officers from both cities, as well as Tippecanoe County Sheriff Bob Goldsmith, attended the meeting, as did others public safety officials, such as Prosecutor Patrick Harrington, Coroner Donna Avolt and others.

If approved, the increase will raise the local income tax from 1.1 percent to 1.28 percent, raising $8 million for public safety. Of that, an estimated $3.9 will be county coffers for use in the sheriff's office, the jail, pensions, prosecutors' office, courts, public defenders, as well as in probation services.

Currently, a person earning $40,000 a year pays about $402 in county income taxes. If approved by one of the cities, the new tax rate means that person earning $40K will pay $65 more in county income taxes — about $467 total.

While other council members favored the increase, Winger stated his case for opposing it by citing historical budget numbers dating back to 2010's budget.

“Sixty-percent of the new spending that we’ve done in the last eight years has been towards public safety. That’s significant," Winger said. “That doesn’t answer, ‘Is it enough?’ But it is significant. And we’ve done it by balancing our budget every year.

“The funding formula is working for a growing county like ours.”

The county funding formula sets minimum funding for reserve funds, and Winger noted that the reserves are $5 millions above that minimum funding mark.

Winger contested the rush to adopt the income tax increase, suggesting that it's not the county that needs it most.

“With all due respect to the two cities, I completely understand that their financial situations are different than ours," Winger said. "But from a county standpoint, I’m not pleased with the race that we had to get here without the numbers to substantiate what the $3.9 million could mean to us on a year-in, year-out basis."

Councilman John Basham supported the tax increase after polling senior citizens, who supported the higher taxes to fund public safety.

“I think it’s a good thing," Tippecanoe County Sheriff Bob Goldsmith said. "We’ll put it to good use.”

He noted that the county council will determine how the county's portion of the new revenue will be allocated.

Discussion during the meeting indicated that townships will share in the public safety revenues, but townships also may petition the county council for an appropriation from the county's portion of the tax revenue.

Goldsmith said this proposed tax will go a long way to resolve problems he and previous sheriffs faced.

“What we need is manpower," Goldsmith said, "and this absolutely helps get to where we need to be."

Reach Ron Wilkins at 765-420-5231 or at rwilkins@jconline.com. Follow on Twitter: @RonWilkins2.